Newly formed small businesses might find short-term success with a sales-oriented approach to marketing, but a more product-oriented strategy can increase the likelihood of long-term success. A product, or market, orientation focuses on pulling customers to you by satisfying an existing need in the marketplace, rather than trying to push buyers to you with sales gimmicks. As many small businesses learn the hard way, even proven sales promotions such as discounts and rebates can hurt your brand in the long-term.

Sales Orientation

A business with a sales orientation focuses on enticing customers with a variety of benefits beyond the actual product. Discounts, buy-one-get-one-free, sweepstakes, rebates and sales can lead to short-term revenue increases, but can send a message that your product or service isn’t worth its full price. For example, new magazines often make the mistake of offering advertisers free color with the purchase of a full-page ad, a significant discount on a series of ads, free banners on the magazine’s website with a contract for display advertising and editorial coverage to drive sales. This leads to selling issue to issue, leading advertisers to believe they won’t have to pay full price in the future and planting questions in the minds of customers as to the magazine’s value.

Market Orientation

Firms that use a market, or product orientation, focus on driving revenue and sales by creating something the marketplace needs or wants, rather than trying to “put lipstick on a pig.” Using the magazine example, a product-oriented publication focuses on building a circulation consisting of its target advertisers’ customers and creating editorial that engages those readers. Advertisers are drawn into advertising to get in front of their customers, especially if their competitors are advertising. By not discounting its advertising, this publication sends a message that it has a valuable product that is worth its full asking price.

Market Research

Market orientation starts with market research. Small businesses must know more than one demographic characteristic of their customer. For example, knowing that your customers are women may not help you understand why they are buying from you. The age, income level and marital status of your primary target customer will help you discover the reason they need or want your product or service. This will help you create or improve your product, rather than using a generic, female-focused advertising campaign. Looking at your competitors will also help you learn what the marketplace wants. Your competitors with the most market share might be successful because of their price, certain product features, where they are selling their product or a brand image they have created. Compare your competitors by looking at their differences to see why the market wants what they have.

The Four Ps

To create a market orientation for your small firm, pay attention to your product, price and place, supported with promotion as you launch your business. Build a better, or at least different, mousetrap based on consumer and competitor research, focus groups and product testing. Once you know exactly what the market wants, create or modify your product or service or add additional versions or lines. Price your product to send the right message to your customers. A low price can signal value or imply that you are cheap. A higher price may lose you sales, but deliver enough high-margin sales among customers who perceive you be higher-end to justify this pricing strategy.

Where you sell your product is just as important as how you sell it. Putting a high-end product into a mass retailer will confuse the market about your brand. Selling certain items online may work well, but if the product is one consumers want to hold, examine and touch, you shouldn’t use this strategy. After you have created, priced and chosen where to distribute your product or service, support it with promotions that announce and entice the benefits of what you sell, rather than using advertising, public relations and promotions that distract from or cheapen your brand.

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About the Author

Sam Ashe-Edmunds has been writing and lecturing for decades. He has worked in the corporate and nonprofit arenas as a C-Suite executive, serving on several nonprofit boards. He is an internationally traveled sport science writer and lecturer. He has been published in print publications such as Entrepreneur, Tennis, SI for Kids, Chicago Tribune, Sacramento Bee, and on websites such Smart-Healthy-Living.net, SmartyCents and Youthletic. Edmunds has a bachelor's degree in journalism.

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Ashe-Edmunds, Sam. "The Importance of Market Orientation for Emerging Firms." Small Business - Chron.com, http://smallbusiness.chron.com/importance-market-orientation-emerging-firms-40155.html. Accessed 21 January 2019.

Ashe-Edmunds, Sam. (n.d.). The Importance of Market Orientation for Emerging Firms. Small Business - Chron.com. Retrieved from http://smallbusiness.chron.com/importance-market-orientation-emerging-firms-40155.html